Edwards Lifesciences Corp

Previous wording

On September 3, 2024, we sold our Critical Care product group (“Critical Care”). In addition, as a next step in our disposal plan to exit businesses that are not focused on implantable medical innovations for structural heart disease, we committed to a plan to sell a non-core product group, with the sale expected to occur in 2025. We concluded that Critical Care met the criteria to be classified as held-for-sale in June 2024 and that the non-core product group met the criteria to be classified as held-for-sale in September 2024. We determined that, when considered together, the conditions for discontinued operations presentation had been met with respect to Critical Care and the non-core product group (collectively, the “discontinued product groups”). As such, the historical financial condition and results of the discontinued product groups have been reflected as discontinued operations in our consolidated condensed financial statements. Prior period amounts have been adjusted to reflect the discontinued operations presentation. Our discussion and analysis of our results of operations is reflective of our continuing operations. See Note 4 to the Consolidated Condensed Financial Statements for further information.

Current wording

On September 3, 2024, we sold our Critical Care product group (“Critical Care”). In addition, as a next step in our disposal plan to exit businesses that are not focused on implantable medical innovations for structural heart disease, we have entered into a definitive agreement to sell a non-core product group for $85 million up-front consideration, subject to customary adjustments, and additional earnouts of up to $40 million. The sale is expected to close in the fourth quarter of 2025. We concluded that Critical Care met the criteria to be classified as held-for-sale in June 2024 and that the non-core product group met the criteria to be classified as held-for-sale in September 2024. We determined that, when considered together, the conditions for discontinued operations presentation had been met with respect to Critical Care and the non-core product group (collectively, the “discontinued product groups”). As such, the historical financial condition and results of the discontinued product groups have been reflected as discontinued operations in our consolidated condensed financial statements. Prior period amounts have been adjusted to reflect the discontinued operations presentation. Our discussion and analysis of our results of operations is reflective of our continuing operations. See Note 4 to the Consolidated Condensed Financial Statements for further information.

Previous wording

Our net sales for the first six months of 2025 were $2.9 billion, representing an increase of $245.6 million compared to the first six months of 2024, driven primarily by sales of our TAVR and TMTT products.

Current wording

Our net sales for the first nine months of 2025 were $4.5 billion, representing an increase of $444.3 million compared to the first nine months of 2024, driven primarily by sales of our TAVR and TMTT products.

Previous wording

Our gross profit increased in the six months ended June 30, 2025, driven primarily by our sales growth. Gross profit as a percentage of sales decreased primarily due to higher manufacturing expenses related to the expansion of new therapies as well as impact from the foreign currency rate fluctuations. The increase in our diluted earnings per share in the six months ended June 30, 2025, was driven by our aforementioned operational performance.

Current wording

Our gross profit increased in the nine months ended September 30, 2025, driven primarily by our sales growth. Gross profit as a percentage of sales decreased primarily due to impact from foreign currency rate fluctuations and higher operational expenses. The decrease in our diluted earnings per share in the nine months ended September 30, 2025, was driven by our aforementioned operational performance.

Previous wording

Net sales of TAVR products increased for the three and six months ended June 30, 2025, driven by higher sales of the Edwards SAPIEN platform in 2025, primarily due to higher sales of the Edwards SAPIEN 3 Ultra RESILIA valve in the United States and Europe. In addition, during the three months ended June 30, 2025, foreign currency exchange rate fluctuations increased net sales outside of the United States by $11.3 million primarily due to the strengthening of the Euro against the United States dollar. During the six months ended June 30, 2025, foreign currency exchange rate fluctuations decreased net sales outside of the United States by $3.8 million due to weakening of multiple other currencies against the United States dollar.

Current wording

Net sales of TAVR products increased for the three and nine months ended September 30, 2025, driven by higher sales of the Edwards SAPIEN platform in 2025, primarily due to higher sales of the Edwards SAPIEN 3 Ultra RESILIA valve in the United States and Europe. In addition, during the three and nine months ended September 30, 2025, foreign currency exchange rate fluctuations increased net sales outside of the United States by $17.0 million and $13.2 million, respectively, primarily due to the strengthening of the Euro against the United States dollar.

Previous wording

Net sales of TMTT products increased for the three and six months ended June 30, 2025, primarily due to higher sales of our PASCAL transcatheter edge-to-edge repair system and our continued launch of the EVOQUE tricuspid valve replacement system in the United States and Europe.

Current wording

Net sales of TMTT products increased for the three and nine months ended September 30, 2025, primarily due to higher sales of our PASCAL transcatheter edge-to-edge repair system and our continued launch of the EVOQUE tricuspid valve replacement system in the United States and Europe.

Previous wording

In April 2025, we received CE Mark for the Edwards SAPIEN M3 mitral valve replacement system for the transcatheter treatment of patients with symptomatic (moderate-to-severe or severe) mitral regurgitation who are deemed unsuitable for surgery or transcatheter edge-to-edge therapy.

Current wording

In April 2025, we received a CE Mark for the Edwards SAPIEN M3 mitral valve replacement system for the transcatheter treatment of patients with symptomatic (moderate-to-severe or severe) mitral regurgitation who are deemed unsuitable for surgery or transcatheter edge-to-edge therapy.

Previous wording

Net sales of Surgical products increased for the three and six months ended June 30, 2025, primarily due to higher sales of the INSPIRIS RESILIA aortic valve in the United States and Europe, the MITRIS RESILIA valve in the United States, Europe, and China, and the KONECT RESILIA tissue valved conduit in the United States.

Current wording

Net sales of Surgical products increased for the three and nine months ended September 30, 2025, primarily due to higher sales of the INSPIRIS RESILIA aortic valve in the United States, Europe and Rest of World, the MITRIS RESILIA valve in the United States, Europe, and China, and the KONECT RESILIA tissue valved conduit in the United States.

Previous wording

Our gross profit increased in the three and six months ended June 30, 2025, primarily driven by our sales growth discussed above. Gross profit as a percentage of net sales decreased for the three and six months ended June 30, 2025, primarily driven by higher manufacturing expenses related to the expansion of new therapies and 0.6 percentage point negative impact from the foreign currency rate fluctuations for the three months ended June 30, 2025.

Current wording

Our gross profit increased in the three and nine months ended September 30, 2025, primarily driven by our sales growth discussed above. Gross profit as a percentage of net sales decreased for the three and nine months ended September 30, 2025, primarily driven by a 1.1 percentage point negative impact from foreign currency rate fluctuations, including the settlement of foreign currency hedging contracts, for the three months ended September 30, 2025, and higher operational expenses for both the three and nine months ended September 30, 2025.

Previous wording

SG&A expenses increased for the three and six months ended June 30, 2025, primarily due to (a) higher field-based personnel-related costs in support of our growth strategy initiatives, primarily in the United States and (b) increased professional services costs to support a transition services agreement. Foreign currency exchange rate fluctuations increased expenses by $1.3 million during the three months ended June 30, 2025, primarily due to the weakening of United States dollar against multiple currencies, and decreased expenses by $5.4 million during the six months ended June 30, 2025, primarily due to the strengthening of United States dollar against the Euro and multiple other currencies.

Current wording

SG&A expenses increased for the three and nine months ended September 30, 2025, primarily due to (a) higher field-based personnel-related costs in support of our growth strategy initiatives, primarily in the United States (b) increased performance-based compensation expenses, and (b) increased professional services costs to support the transition services agreement. Foreign currency exchange rate fluctuations increased expenses by $7.3 million and $1.9 million during the three and nine months ended September 30, 2025, primarily due to the weakening of United States dollar against the Euro.

Previous wording

R&D expenses increased for the three and six months ended June 30, 2025, primarily due to increased investments in implantable heart failure management innovations, including increased clinical activity, after our recent business combinations, partially offset by decreased investments in our transcatheter aortic valve innovations.

Current wording

R&D expenses increased for the three and nine months ended September 30, 2025, primarily due to increased clinical activity related to our recent investments in implantable heart failure management innovations and higher performance-based compensation expense, partially offset by decreased investments in our transcatheter aortic valve innovations.

Previous wording

We incurred certain litigation expenses related to intellectual property litigation and tax litigation of $15.5 million and $8.1 million during the three months ended June 30, 2025 and 2024, respectively, and $26.4 million and $17.0 million during the six months ended June 30, 2025 and 2024, respectively.

Current wording

We incurred certain litigation expenses related to legal proceedings, intellectual property litigation and tax litigation of $90.4 million and $10.8 million during the three months ended September 30, 2025 and 2024, respectively, and $116.8 million and $27.8 million during the nine months ended September 30, 2025 and 2024, respectively (See Note 11 to the Consolidated Condensed Financial Statements).

Previous wording

Other operating income, net of $21.3 million and $40.4 million in three and six months ended June 30, 2025, respectively, included income from a transition services agreement of $19.9 million and $37.8 million, respectively. (see Note 4 to the Consolidated Condensed Financial Statements).

Current wording

Other operating income, net of $12.5 million and $52.9 million in three and nine months ended September 30, 2025, respectively, included income from a transition services agreement of $12.7 million and $50.5 million, respectively (see Note 4 to the Consolidated Condensed Financial Statements).

Previous wording

Interest income was $37.4 million and $73.9 million for the three and six months ended June 30, 2025, respectively, and $15.5 million and $32.0 million for the three and six months ended June 30, 2024, respectively. The increase in interest income was primarily due to higher average investment balance during the three and six months ended June 30, 2025.

Current wording

Interest income was $38.6 million and $112.5 million for the three and nine months ended September 30, 2025, respectively, and $24.3 million and $56.3 million for the three and nine months ended September 30, 2024, respectively. The increase in interest income was primarily due to a higher average investment balance during the three and nine months ended September 30, 2025.

Previous wording

Loss on impairment of $47.1 million in both three and six months ended June 30, 2025 included loss on impairment related to our determination to not exercise an option to acquire one of our cost method investments (see Note 5 to the Consolidated Condensed Financial Statements).

Current wording

Loss on impairment of $47.1 million in the nine months ended September 30, 2025 included loss on impairment related to our determination to not exercise an option to acquire one of our VIE investments (see Note 6 to the Consolidated Condensed Financial Statements).

Previous wording

Our effective income tax rate attributable to continuing operations was 16.1% and 5.2% for the three months ended June 30, 2025 and 2024, respectively, and 16.1% and 8.8% for the six months ended June 30, 2025 and 2024, respectively. The increase in the effective rate between the six months ended June 30, 2025 and 2024 was primarily due toan increase in global minimum tax (“Pillar Two,” as noted below), a decrease in the tax benefit from employee share-based compensation, and a decrease in the benefit from favorable global income tax audit settlements. In addition, the effective rates for the six months ended June 30, 2025 and 2024 were lower than the federal statutory rate of 21% primarily due to (1) foreign earnings taxed at lower rates, (2) United States federal and California research and development credits, and (3) the tax benefit from employee share-based compensation. The effective rates include a tax benefit (shortfall) from employee share-based compensation attributable to continuing operations of$(0.3) million and$3.8 million for the three months ended June 30, 2025 and 2024, respectively, and $1.0 million and$9.5 million for the six months ended June 30, 2025 and 2024, respectively.

Current wording

Our effective income tax rate attributable to continuing operations was 16.1% and 10.1% for the three months ended September 30, 2025 and 2024, respectively, and 16.1% and 9.2% for the nine months ended September 30, 2025 and 2024, respectively. The increase in the effective rate between the nine months ended September 30, 2025 and 2024 was primarily due toan increase in global minimum tax (“Pillar Two,” as noted below), a decrease in the tax benefit from employee share-based compensation, and a decrease in the benefit from favorable global income tax audit settlements. In addition, the effective rates for the nine months ended September 30, 2025 and 2024 were lower than the federal statutory rate of 21% primarily due to (1) foreign earnings taxed at lower rates, (2) United States federal and California research and development credits, and (3) the tax benefit from employee share-based compensation. The effective rates include a tax benefit (shortfall) from employee share-based compensation attributable to continuing operations of$(0.3) million and$0.6 million for the three months ended September 30, 2025 and 2024, respectively, and $0.8 million and$10.1 million for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

In the first quarter of 2022, we executed an Advance Pricing Agreement (“APA”) between Japan and Switzerland covering distribution transactions for tax years 2020 through 2024, and in 2023, we executed an APA between Japan and the United States covering tax years 2020 through 2024. We also executed an APA in the fourth quarter of 2024 between Japan and Singapore covering tax years 2022 through 2026 with roll-back terms to cover the distribution of TAVR products beginning in 2020 and the distribution of Surgical products beginning in 2018. Also in the fourth quarter of 2024, we filed with the Japanese tax authorities an APA renewal application between Japan and the United States covering tax years 2025 through 2029. We filed the APA renewal application with the United States tax authorities in the first quarter of 2025.

Current wording

In the first quarter of 2022, we executed an Advance Pricing Agreement (“APA”) between Japan and Switzerland covering distribution transactions for tax years 2020 through 2024, and in 2023, we executed an APA between Japan and the United States covering tax years 2020 through 2024. We also executed an APA in the fourth quarter of 2024 between Japan and Singapore covering tax years 2022 through 2026 with roll-back terms to cover the distribution of TAVR products beginning in 2020 and the distribution of Surgical products beginning in 2018. Also in the fourth quarter of 2024, we filed with the Japanese tax authorities an APA renewal application between Japan and the United States covering tax years 2025 through 2029. We filed the APA renewal application with the United States tax authorities in the first quarter of 2025 and are engaged in ongoing discussions.

Previous wording

During 2021, we received a Notice of Proposed Adjustment (“NOPA”) from the IRS for the 2015 through 2017 tax years relating to transfer pricing involving Surgical/TAVR intercompany royalty transactions between our United States and Switzerland subsidiaries. The NOPA proposed a substantial increase to our United States taxable income, which could result in additional tax expense for the 2015 through 2017 period of approximately $250 million and reflects a departure from a transfer pricing method we had previously agreed upon with the IRS. We disagreed with the NOPA and pursued an administrative appeal with the IRS Independent Office of Appeals (“Appeals”). The Appeals process culminated in the third quarter of 2023 when we and Appeals concluded that a satisfactory resolution of the matter at the administrative level was not possible.

Current wording

During 2021, we received a Notice of Proposed Adjustment (“NOPA”) from the IRS for the 2015 through 2017 tax years relating to transfer pricing involving Surgical/TAVR intercompany royalty transactions between our United States and Switzerland subsidiaries. The NOPA proposed a substantial increase to our United States taxable income, which could result in additional tax expense for the 2015 through 2017 period of approximately $255 million and reflects a departure from a transfer pricing method we had previously agreed upon with the IRS. We disagreed with the NOPA and pursued an administrative appeal with the IRS Independent Office of Appeals (“Appeals”). The Appeals process culminated in the third quarter of 2023 when we and Appeals concluded that a satisfactory resolution of the matter at the administrative level was not possible.

Previous wording

We plan to vigorously contest the additional tax claimed by the IRS through the judicial process. Final resolution of this matter is not likely within the next 12 months. We believe the amounts previously accrued related to this uncertain tax position are appropriate for a number of reasons, including the interpretation and application of relevant tax laws and accounting standards to our facts and, accordingly, have not accrued any additional amount based on the NOD and other proceedings to date. Nonetheless, the outcome of the judicial process cannot be predicted with certainty, and it is possible that the outcome of that process could have a material impact on our consolidated financial statements. As noted below, similar material tax disputes may arise for the 2018 through 2024 tax years. We made deposits with the IRS of $75 million in November 2022, and $305.1 million in March 2024, to prevent the further accrual of interest on that portion of any additional tax and interest we may ultimately be found to owe while we prepare to contest through the judicial process the IRS's entitlement to any of the additional tax claimed by the IRS. The IRS converted those deposits to advance payments, and, on December 20, 2024, we filed administrative claims for refunds of those payments with the IRS for the 2015 through 2017 tax years. We expect that the IRS will either deny or fail to act on those refund claims, thereby enabling us to sue for refunds in the appropriate judicial forum.

Current wording

We plan to vigorously contest the additional tax claimed by the IRS through the judicial process. Final resolution of this matter is not likely within the next 12 months. We believe the amounts previously accrued related to this uncertain tax position are appropriate for a number of reasons, including the interpretation and application of relevant tax laws and accounting standards to our facts and, accordingly, have not accrued any additional amount based on the NOD and other proceedings to date. Nonetheless, the outcome of the judicial process cannot be predicted with certainty, and it is possible that the outcome of that process could have a material impact on our consolidated financial statements. As noted below, similar material tax disputes may arise for the 2018 through 2024 tax years. We made deposits with the IRS of $75 million in November 2022, and $305.1 million in March 2024, to prevent the further accrual of interest on that portion of any additional tax and interest we may ultimately be found to owe while we prepare to contest through the judicial process the IRS's entitlement to any of the additional tax claimed by the IRS. The IRS converted those deposits to advance payments, and, on December 20, 2024, we filed administrative claims for refunds of those payments with the IRS for the 2015 through 2017 tax years. Though the IRS could still deny those refund claims, we are now able to sue for refunds in the appropriate judicial forum even without an IRS denial.

Previous wording

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We are currently assessing its impact on our consolidated financial statements.

Current wording

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The OBBBA did not have a material impact to our estimated annual effective rate for 2025 and we are currently evaluating the potential impact on future periods.

Previous wording

As of June 30, 2025, cash and cash equivalents, and short-term investments held in the United States and outside of the United States were $3.4 billion and $638.3 million, respectively.

Current wording

As of September 30, 2025, cash and cash equivalents, and short-term investments held in the United States and outside of the United States were $3.4 billion and $438.0 million, respectively.

Previous wording

In June 2018, we issued $600.0 million of 4.3% fixed-rate unsecured senior notes (the “2018 Notes”) due June 15, 2028. We may redeem the 2018 Notes, in whole or in part, at any time and from time to time at specified redemption prices. As of June 30, 2025, we have not elected to redeem any of the 2018 Notes. As of June 30, 2025, the carrying value of the 2018 Notes was $598.0 million.

Current wording

In June 2018, we issued $600.0 million of 4.3% fixed-rate unsecured senior notes (the “2018 Notes”) due June 15, 2028. We may redeem the 2018 Notes, in whole or in part, at any time and from time to time at specified redemption prices. As of September 30, 2025, we have not elected to redeem any of the 2018 Notes. As of September 30, 2025, the carrying value of the 2018 Notes was $598.2 million.

Previous wording

From time to time, we repurchase shares of our common stock under share repurchase programs authorized by the Board of Directors. We consider several factors in determining when to execute share repurchases, including, among other things, expected dilution from stock plans, cash capacity, and the market price of our common stock. During the six months ended June 30, 2025, under the Board authorized repurchase program, we repurchased a total of 3.4 million shares at an aggregate cost of $306.9 million, including pursuant to a $250 million accelerated share repurchase agreement (see Note 10 to the Consolidated Condensed Financial Statements). As of June 30, 2025, we had remaining authority to purchase $1.1 billion of our common stock under the share repurchase program.

Current wording

From time to time, we repurchase shares of our common stock under share repurchase programs authorized by the Board of Directors. We consider several factors in determining when to execute share repurchases, including, among other things, expected dilution from stock plans, cash capacity, and the market price of our common stock. During the nine months ended September 30, 2025, under the Board authorized repurchase program, we repurchased a total of 11.2 million shares at an aggregate cost of $844.9 million, including pursuant to $750 million accelerated share repurchase agreements executed during the period (see Note 10 to the Consolidated Condensed Financial Statements). As of September 30, 2025, we had remaining authority to purchase $2.1 billion of our common stock under the share repurchase program.

Previous wording

Consolidated Cash Flows - For the six months ended June 30, 2025 and 2024:

Current wording

Consolidated Cash Flows - For the nine months ended September 30, 2025 and 2024:

Previous wording

Net cash flows provided byoperating activities of $570.6 million for the six months ended June 30, 2025, increased $252.6 million over the same period last year primarily due to (1) lower tax payments during the six months ended June 30, 2025, which included $160.0 million of local tax payments associated with the sale of Critical Care, compared to the six months ended June 30, 2024, which included a $305.1 million tax deposit we made to mitigate interest on potential tax liabilities we are contesting through the judicial process (see Note 14 to the Consolidated Condensed Financial Statements), and (2) improved operating performance.

Current wording

Net cash flows provided byoperating activities of $1,144.3 million for the nine months ended September 30, 2025, increased $474.5 million over the same period last year primarily due to (1) lower tax payments during the nine months ended September 30, 2025, which included $175.3 million of local tax payments associated with the sale of Critical Care, compared to the nine months ended September 30, 2024, which included a $305.1 million tax deposit we made to mitigate interest on potential tax liabilities we are contesting through the judicial process (see Note 14 to the Consolidated Condensed Financial Statements), and (2) improved operating performance.

Previous wording

Net cash used ininvesting activities of $86.8 million for the six months ended June 30, 2025, consisted primarily of capital expenditures of $105.3 million, an issuance of notes receivable of $70.6 million, a payment for a net working capital adjustment of $36.3 million related to the sale of Critical Care, and payment of acquisition options of $17.0 million, partially offset by net proceeds from investments of $145.8 million.

Current wording

Net cash used ininvesting activities of $514.6 million for the nine months ended September 30, 2025, consisted primarily of net purchases of investments of $198.5 million, capital expenditures of $162.8 million, an issuance of notes receivable of $93.4 million, a payment for a net working capital adjustment of $36.3 million related to the sale of Critical Care, and payment of acquisition options of $19.6 million.

Previous wording

Net cash provided by investing activities of $187.9 million for the six months ended June 30, 2024, consisted primarily of net proceeds from investments of $391.7 million, partially offset by capital expenditures of $150.7 million.

Current wording

Net cash provided by investing activities of $2.9 billion for the nine months ended September 30, 2024, consisted primarily of the sale of our Critical Care product group for proceeds of $3.9 billion, partially offset by capital expenditures of $202.6 million and net proceeds from investments of $2.3 million.

Previous wording

Net cash used infinancing activities of $205.3 million for the six months ended June 30, 2025, consisted primarily of purchases of treasury stock of $314.1 million, partially offset by proceeds from stock plans of $107.1 million.

Current wording

Net cash used infinancing activities of $945.4 million for the nine months ended September 30, 2025, consisted primarily of purchases of treasury stock of $852.8 million and purchase of the remaining noncontrolling interest in a subsidiary of $233.7 million, partially offset by proceeds from stock plans of $141.8 million.

Previous wording

Net cash used in financing activities of $34.9 million for the six months ended June 30, 2024, consisted primarily of purchases of treasury stock of $158.3 million, partially offset by proceeds from stock plans of $116.4 million.

Current wording

Net cash used in financing activities of $1.0 billion for the nine months ended September 30, 2024, consisted primarily of purchases of treasury stock of $1.2 billion, partially offset by proceeds from stock plans of $150.9 million.